Kyat depreciates at K2,880 against US dollar despite reference exchange rate

Kyat weakened to K2,880 against the US dollar in the unauthorized market despite CBM’s reference rate of K2,100.
Kyat depreciation against greenbacks persists at K2,860 in the grey market although the Central Bank of Myanmar set the reference exchange rate at K2,100.
CBM has set the currency trading band at 0.3 per cent for the Kyat to fluctuate between these two specified upper and lower exchange rates for transactions, selling or buying, according to a directive issued by the CBM on 10 August 2022.
Therefore, financial institutions including banks and informal money exchanges are instructed to set a dollar value at K2,094 for buying and K2,106 for selling. However, the over-the-counter Kyat-dollar exchange rate was K2,865 for buying and K2,880 for selling on 25 February.
Investigation and Prosecuting of market manipulation to hike the exchange rate in the local forex market with the malicious rumours will be undertaken, according to the Central Bank of Myanmar’s statement released on 10 February.
Some exporters, importers and banks are attempting to raise the exchange rate owing to the rumours. The statement called for bank institutions to govern the market and investigate those fraudsters who circulate rumours.
The CBM released a notice that the exporters, importers and banking institutions are asked not to elevate the exchange rate. Those banking institutions that do not abide by financial regulations will face legal action as well.
Last August, a dollar value hit an all-time high of over K4,500 in the grey market. Consequently, the CBM sold dollars at its auction market for the sectors in need, to control the soaring dollar. A total of $443.8 million were sold at an auction rate in 2021 as well. — NN/EM